2021 (9) TMI 379 - HC - VAT and Sales Tax

Jurisdiction - Power of Tribunal to enhance the tax liability - Section 57 of the U.P. Value Added Tax Act, 2008 - manner of assessment by the taxing authorities, correct or not - working days ought to have been worked out treating it to be 300 working days, whereas assessment was made on the basis of lesser days of working - Whether the Tribunal being a last fact finding authority is legally correct in remanding the case to appellate authority for decision afresh when all the material for deciding the case was available on record? - HELD THAT - It is admitted fact that the order of assessment the assessee preferred appeal and all facts and materials relating to determination of petitioner's liability to pay tax were available on record before the appellate authority. When the matter was carried further in appeal before the Tribunal, all relevant records were available with the Tribunal itself. The Tribunal, in such circumstances, could exercise its power in the manner specified in Sub-section (8) of Section 57 of the Act of 2008 - the enquiry contemplated in Sub-section (b) of Section 57(8) of UP VAT Act, is with regard to determination of facts which are not sufficient for determining the liability to determine tax. Materials for correct determination of liability to pay tax did exist on record. The Tribunal would not be justified in suggesting a different course only for enhancing the tax liability. The Tribunal is an independent adjudicatory authority having jurisdiction to determine the liability to pay tax. Under the Act it has no power to enhance the liability to pay tax determined by the taxing authorities. Where sufficient material exists on record the Tribunal is expected to decide the matter, on merits. It has no power to pass an order of remand only because it is of the opinion that a higher tax liability ought to be imposed although revenue has decided not to prefer any appeal against the determination of tax liability. Remand would not be permissible unless it is eminently required for justifiable reasons - The Tribunal could have either accepted the determination made by the authorities or could have varied such order but a direction of remand is not justified since all relevant materials did exist on record before it. In such circumstances the order of remand passed by the Tribunal is not found to be in consonance with statutory scheme, as has been interpreted by this Court. The Tribunal is not justified in directing remand for a fresh determination of liability by the appellate authority in the manner suggested by the Tribunal - answered in favour of the assessee.

Summary

Issues:
Challenge to composite order passed by Tribunal on assessment basis.

Analysis:
The revisionist challenged a composite order passed by the Tribunal regarding Second Appeals under different sections of the U.P. VAT Act. The Tribunal observed that the assessment by taxing authorities was incorrect as it was based on fewer working days than actual. The matter was remanded to the first appellate authority for proper assessment.

The revisionist argued that the Tribunal's order was beyond its specified powers under Section 57 of the Act. It was contended that the Tribunal's direction for remand to enhance the tax liability was unjustified, especially when the revenue did not appeal against the initial assessment.

The revisionist relied on previous court judgments to support their argument against the Tribunal's remand order. The court emphasized that remands should not be ordered lightly and should only be done when necessary for strong reasons, especially when all relevant materials are available for a final decision.

The Tribunal's power to direct remand is limited to cases where adjudication is not possible based on the materials available. In this case, the Tribunal had access to all relevant records and should have decided the matter on its merits instead of suggesting a different course to increase tax liability.

The court held that the Tribunal's remand order was not in line with the statutory scheme and previous judicial interpretations. The question of law was answered in favor of the assessee, stating that the Tribunal was not justified in directing a remand for a fresh determination of liability by the appellate authority.

As a result, the revision was allowed, and the Tribunal was instructed to review the case on its merits based on the available records, ensuring an expeditious conclusion of the proceedings.